Cuban market ripe for U.S. grain imports, NCGA says

WASHINGTON, July 1, 2015 – If and when the
U.S. lifts its long-term trade restrictions on Cuba, American grain producers
will be ready to capitalize on new market opportunities, Rob Elliott, the first
vice president of the National Corn Growers Association (NCGA), told Agri-Pulse Tuesday after he and industry
allies returned from a weekend scouting trip to the island.

“Folks in Cuba anticipate what
reestablishing diplomatic relations might lead to… (and) they’re starving for
the opportunity for something to happen,” Elliott said. Currently, Cuba imports
about 35 million bushels of corn annually from the U.S., which “isn’t huge,” he
admitted, but that figure is likely to increase if trade restrictions are
relaxed.

Cuba has almost no poultry production and
very little egg production, Elliott said. And the dairy industry shrunk
drastically around 1989 with the collapse of the communist bloc in Eastern
Europe and the subsequent fall of the Soviet Union, which had been subsidizing
Cuban agriculture with livestock feed. Today, Cuba, with a population of 11
million people and an agricultural market worth $1.7 billion, imports 80 percent of its food.

With Cuba just 90 miles away from the U.S.
mainland, American grain producers are uniquely positioned to export the feed
vital to growing the country’s livestock sectors, Elliott argued.

He suggested that the U.S. could maximize
trade opportunities in Cuba by investing in port infrastructure, like Brazil
has at the Port of Mariel on Cuba’s north coast. Cuba has “a lot of open land”
and “a lot of labor,” but “they don’t have a lot of capital,” to set the stage
for increased foreign trade, he said.

In addition to Brazil, Canada, European
nations and China “are in there looking at, and proposing” possible
investments, Elliott said, and in that way “are probably ahead of the U.S.”

While the U.S. has been allowed to export agricultural products to Cuba since 2000, “we’re probably not their favorite trade partner because of some
of those hand-tying conditions that we’ve got set up,” Elliott said. (Today,
U.S. and Cuban officials are expected to publicly announce they will open embassies
in each other's capitals and re-establish diplomatic relations for the first
time since 1961.)

Under current law, the U.S. cannot import
any products from Cuba and U.S. banks are
prohibited from providing lines of credit for Cuba-bound exports, so deals are
often held up or limited by cash-only requirements.

There are several bills before Congress that would “open (up) opportunities to do more trade” by
loosening these restrictions, Elliot said. “This embargo… hasn’t worked, maybe
it’s time to try a different route now.”

Other NCGA leaders Chris Novak and Zach
Kinne were joined on the trip by the chair, vice chair and CEO of the U.S.
Grains Council: Ron Gray, Alan Tiemann and Tom Sleight. Doyle Lentz, the
chairman of the North Dakota Barley Council also participated in the trip. The
group met with representatives from ALIMPORT, the Cuban government agency that
manages all of the country’s imports, in addition to foreign trade and
agriculture officials. “What we heard from the Cuban people was that they would
welcome U.S. investment, and at the very least just opening to tourism would
help them significantly with their economy,” Elliott said.

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